How to overcome a recession

Tuesday

Jan 29, 2013 at 6:00 AMJan 29, 2013 at 9:22 AM

By Jack P. Calareso

No one would argue that the current recession didn't dramatically impact the job market, the unemployment rate, and individual salaries and benefits. Despite the predictions and the pundits, it is still unclear how quickly we will move as a country away from the recession and what strategies could be effective. Perhaps in this new year we can have some degree of optimism that state and federal officials will work together and develop a plan that is good for the country. But we shall have to wait and see.

While we can hope for this future, the fact is that students continue to make decisions about their education, try to decide how to balance career interests with job opportunities, and graduate every year from colleges and universities with concerns about whether or not there will be the right job or any job.

A recently released report from the Pew Charitable Trusts finally provides facts about these issues, not opinions. And while the news is not great, it is definitely positive.

The report, titled “How Much Protection Does a College Degree Afford? The Impact of the Recession on Recent College Graduates,” focuses on the practical issues of finding a job and earning money. It provides a series of analyses drawn from the data collected in the Current Population Survey (CPS) from 2003-2011.

The CPS is administered monthly and sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (BLS). It is “the primary source of labor force statistics for the population of the United States. The CPS is the source of numerous high-profile economic statistics, including the national unemployment rate, and provides data on a wide range of issues relating to employment and earnings. The CPS also collects extensive demographic data that complement and enhance our understanding of labor market conditions in the nation overall, among many different population groups, in the states and in sub-state areas.”

The samples analyzed included graduates between the ages of 21 and 24 in the pre-recession period, the time of recession, and in the post-recession period (as defined by the Bureau of Labor). The analyses compared those with a high school diploma, and two-year and four-year college degrees.

Study after study has demonstrated that a college degree increases the chances of upward mobility and reduces the chances of downward mobility. However, in these challenging economic times, there are unsubstantiated perceptions that the “labor market is beginning to unravel for recent graduates.”

Such perceptions have led to a number of featured articles and news stories (not research) about the high levels of debt, the limited job opportunity, and the lack of value of a college degree. In other words, why do you need a college degree if you are going to end up living in your parents' basement?

The Pew study paints a very different picture, based on the facts, not just perceptions or anecdotes. And the data are clear: A college degree is still the best investment for career opportunity and the best protection from a downturn in the economy. It is evident that all young workers were impacted by the recession with fewer jobs and lower wages. But what this study reveals is that the declines for college graduates were far less severe than for those without this level of education.

Here are some conclusions:

Before the recession, just over half (55 percent) of young adults with a high school diploma were employed, compared with almost two-thirds (64 percent) of those with an associate degree, and 69 percent of those with a bachelor's degree.

Job losses during the recession made existing employment gaps worse. Employment declines for those with high school and associate degrees were 16 percent and 11 percent respectively, and just 7 percent for those with a bachelor's degree.

Graduates with a bachelor's degree had more than twice as many college-level jobs as those with an associate's degree, and more than four times as many as high school graduates. This advantage did not deteriorate during the recession. And while wages decreased for all groups, the decrease was less pronounced for recent four-year college graduates.

There is no doubt that the end of the recession and economic growth will benefit everyone. But this study provides some good news for those working on their degrees. Go to college. Study hard. It really is worth it.

Jack P. Calareso, Ph.D., is president of Anna Maria College in Paxton.

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